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With credit ratings agencies essentially poised to reject refinancing plans for Portugal and Greece it may be well to remember who pays the agencies’ bills — and, of course, who will actually bear the brunt of their ratings downgrades.

After all — as the Youtube clip below clearly points out — agency credit ratings are merely opinions and not meant to guide investment decisions….

I’m still looking for Google’s justification for this move with Verizon. I’m a Verizon customer. Between my broadband provider and Verizon’s data access charges I already pay 100 a month for internet access. The potential for carving off elements of my current data access for additional charges (particularly if you are asking me to trust Verizon to be fair and reasonable in assessing charges for additional services) is a bit disturbing. Up till now I’ve appreciated Google’s ad based rather than access based business model for data services. Particularly their bid in the 700mhz spectrum auction several years ago. What’s up Google?

Efforts to protect net neutrality that involve government regulation have always faced one fundamental obstacle: the substantial danger that the regulators will cause more harm than good for the Internet. The worst case scenario would be that, in allowing the FCC to regulate the Internet, we open the door for big business, Hollywood and the indecency police to exert even more influence on the Net than they do now.

On Monday, Google and Verizon proposed a new legislative framework for net neutrality. Reaction to the proposal has been swift and, for the most part, highly critical. While we agree with many aspects of that criticism, we are interested in the framework’s attempt to grapple with the Trojan Horse problem. The proposed solution: a narrow grant of power to the FCC to enforce neutrality within carefully specified parameters. While this solution is not without its own substantial dangers, we think it deserves to be considered further if Congress decides to legislate.

Unfortunately, the same document that proposed this intriguing idea also included some really terrible ideas. It carves out exemptions from neutrality requirements for so-called “unlawful” content, for wireless services, and for very vaguely-defined “additional online services.” The definition of “reasonable network management” is also problematically vague. As many, many, many have already pointed out, these exemptions threaten to completely undermine the stated goal of neutrality.

IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

I overheard a comment from someone who recently moved to Mendocino from Humboldt. One of the positive aspects was a change in the character of political dialog: “politics in Humboldt is a blood sport.”

Elizabeth Warren appears capable of well-reasoned discussions and responsiveness to opposing points of view. We need more examples of this at every level of public policy: county, state, national and international.

The pair praised Warren for conducting exhaustive investigations into the federal government’s rescue of firms such as American International Group and GMAC, even when those reviews produced results that didn’t always shine a glowing light on the Treasury Department.

“It is important to note that the panel has been critical of policies and decisions implemented by Democrats and Republicans alike,” wrote University of Kentucky economics Professor Kenneth Troske and J. Mark McWatters, a Dallas lawyer and certified public accountant, who serve on the five-member panel. “There is great virtue in that because, while it is easy to question the decisions made by members of the other political party, it takes courage to publicly question the decisions made by members of your own party.”

They added, “We often debate a wide variety of issues with Professor Warren and have found her quite willing to modify her views if presented with well-reasoned, cogent arguments.”

One year ago, Lehman Brothers declared bankruptcy, bringing to a head the growing chaos on Wall Street.

In the days and weeks that followed Lehman’s September 15, 2008, collapse, credit markets would freeze, the stock market plunged, the government took a controlling interest in AIG, Wachovia and Merrill Lynch merged themselves out of existence, the Congress approved a plan to spend $700 billion to bail out Wall Street, the Federal Reserve innovated an array of programs involving trillions of dollars worth of support for Wall Street and the credit markets, and the national economy — and much of the global economy — declined precipitously.

As the crisis unfolded, it quickly became commonplace to suggest that nothing would ever be the same, on Wall Street or in the national economy. The Wall Street goliaths had been humbled — and many had gone out of business, via merger or bankruptcy. Deregulation went out of style and even former Federal Reserve Chair Alan Greenspan indicated that the conceptual underpinnings of his deregulatory approach had proven flawed.

One year later, it is clear that the conventional wisdom emerging as the crisis developed was wrong.

…for those who can take the heat and cope with the pollen, spending more time in nature might have some surprising health benefits. In a series of studies, scientists found that when people swap their concrete confines for a few hours in more natural surroundings — forests, parks and other places with plenty of trees — they experience increased immune function.

Stress reduction is one factor. But scientists also chalk it up to phytoncides, the airborne chemicals that plants emit to protect them from rotting and insects and which also seem to benefit humans.

The U.S. dollar started the week mostly steady against its European rivals, though the buck tumbled against its risk-sensitive counterparts in Australia, New Zealand and Canada, following China’s weekend decision to allow its currency to strengthen.

Since July 2008, China had essentially tethered the yuan to the U.S. dollar to help protect the world’s third-largest economy from the global financial crisis. The move Saturday by the People’s Bank of China, the nation’s central bank, boosted investor appetite for riskier assets on the notion a freer Chinese currency might stimulate global economic activity.

Consequently, the greenback fell to 5-week lows against Aussie, kiwi and Canadian dollars. Earlier overnight, the U.S. currency neared a one-month low against the euro, though the buck pared some of its previous losses at the onset of the North American session.

NEW YORK (CNNMoney.com) — Where are the real opportunities for growth on Wall Street? Try China.
The biggest financial firms haven’t tried to hide their ongoing ambitions to grow in the world’s fastest-growing economy.

June 10 (Bloomberg) — Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.

“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”

Soros, 79, said the current situation in the world economy is “eerily” reminiscent of the 1930s with governments under pressure to narrow their budget deficits at a time when the economic recovery is weak.

Lumber prices are sinking. And while that might make a trip to Home Depot cheaper, it’s also a sign that the global economic recovery and the U.S. housing rebound are in danger of stalling.

Only a few months ago, inflation was the main worry of many economists. But falling prices for the raw materials of many industries, including lumber, have set off deflation warning bells for some economists, who worry that they could signal another global economic downturn.

Prices for framing lumber have tumbled 21% from their peak only five weeks ago, according to figures from the National Association of Home Builders. Prices are also falling for a wide variety of other industrial materials in recent weeks.

“Coastal factories are increasing hourly payments to workers. Local governments are raising minimum wage standards. And if China allows its currency, the renminbi, to appreciate against the United States dollar later this year, as many economists are predicting, the relative cost of manufacturing in China will almost certainly rise. “

…emerging economies, once considered much more vulnerable, have been remarkably resilient. With growth returning to pre-2008 breakout levels, the performance of China, India, and Brazil is an important engine of expansion for today’s global economy. …

So it is important to know whether this breakout growth phase is sustainable. The answer comes in two parts. One depends on emerging economies’ ability to manage their own success; the other relates to the extent to which the global economy can accommodate this success. The answer to the first question is reassuring; the answer to the second is not.

While still able to exploit the scope for catch-up growth, emerging economies must undertake continuous, rapid, and at times difficult structural change, along with a parallel process of reform and institution building. In recent years, the systemically important countries have established an impressive track record of adapting pragmatically and flexibly. This is likely to continue.

…Emerging economies’ ability to provide the growth lubrication that facilitates adjustment in industrial countries is also a function of the latter countries’ willingness to accommodate tectonic shifts in the operation and governance of the global economy.

Mark Thoma comments:

The political problem will, I think, take care of itself. As the developing countries grow and gain economic power, and they will whether developed economies like it or not, the political and institutional power will follow. The old institutions will either change with the shifting global economy, or be replaced by new ones. I don’t think developed economies will have any choice except to “accommodate tectonic shifts in the operation and governance of the global economy.” For one, corporations of today do not have traditional national boundaries, and the globalization of production cannot be easily reversed. We can make it hard, or we can accept the inevitable. Other countries are starting to grow up, and we will have to begin treating them like adults. That means, among other things, giving them a seat at the big table.